On a Short-Run Macro Model Diagram,the Impact of a Decrease

question 76

Multiple Choice

On a short-run macro model diagram,the impact of a decrease in government purchases (G) is illustrated by

• A) a downward shift of the aggregate expenditure line by the full amount of the change in G
• B) an upward shift of the aggregate expenditure line followed by an equal downward shift of that line
• C) a leftward shift of the money supply curve
• D) a downward shift of the aggregate expenditure line by an amount less than the change in G
• E) the increase in real income

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Definitions:

Indirect Method

A method for creating the cash flow statement by modifying net income according to non-cash activities and fluctuations in working capital.

Operating Activities

Activities directly related to the principal revenue-producing activities of an entity, detailed in the cash flow statement.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life, reflecting its consumption, expiration, or obsolescence.

Patent

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